Banks have sufficient cash, says FM

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman reviewed the performance of Public Sector Banks here in a meeting with bank chief executives and said banks have sufficient cash available and they have been asked to provide bill discounting facility to ensure availability of finance to Micro, Small and Medium Enterprises (MSMEs).

In the review, it was noted that during the first phase of the Customer Outreach Initiative, from October 1-9, PSBs disbursed Rs 81,781 crore, including new term loans of Rs 34,342 crore.

Credit and implementation of measures announced to support economic growth were reviewed in-depth at the meeting.

Banks shared their plans for the second phase of the Customer Outreach Initiative, with camps in about 150 districts between October 21 to 25, building on the momentum already built.

As in the first phase, NBFCs would also participate. Further, receivable bill discounting for MSMEs would also be a focus area. Details of specific dues outstanding of the companies, including MSME, with the corporates and aggregating approximately Rs 40,000 crore will be shared by the Ministry of Corporate Affairs with banks for reaching out to MSMEs during the Customer Outreach Initiative for bill discounting and enabling MSMEs to access working capital.

In addition, home loans, vehicle loans, agriculture loans, education loans, and other MSME and personal loans would be focused upon.

It was reiterated that the outreach would be without any dilution in diligence or underwriting standards. It was also noted that with the recent recapitalisation of over Rs 55,000 crore, PSBs are well equipped to support credit needs.

It was noted in the review that PSBs have continued to support the NBFC/HFC sector. Since the IL&FS default in September 2018 till October 10, 2019, PSBs have sanctioned total support of Rs 3,97,557 crore in the form of credit as well as pool-buyouts of Rs 1,07,792 crore, including Rs 15,455 crore under the newly launched Partial Credit Guarantee Scheme.

Disbursement by PSBs to NBFCs has been Rs 39,068 crore since the last review on September 19, 2019 till October 10, 2019.

The PSB’s chief executives informed that they will continue expeditious disbursement of pool buy-outs including those sanctioned under the Partial Credit Guarantee Scheme. Government would also issue suitable clarifications to banks with a view to expedite processing of proposals under the scheme.